Q1 2009 Costs to Buy a Business
How Much Is My Naperville Business Worth?
We just received the latest Naperville, Illinois business valuation data for First Quarter 2009.
Q1 2009 Business Valuations in Naperville, IL
According to statistics issued by BizBuySell.com, Naperville business-for-sale listings in Q1 2009 had a median asking price of $275,000.
That compares to a median ask price of $260,000 in Q1 2008. Because the median ask price for businesses for sale in Naperville has risen year over year, we can conclude that many smaller firms in Naperville are holding off on selling.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Naperville company for much less. Alternatively, some Naperville businesses may be selling for much more.
Also, this is the asking price for a Naperville business. When a business owner lists a company for sale, they typically set a price that ends up being more than the eventual sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it depends on deal specifics. So, a business listed for $100,000 might sell for between $85,000 and $90,000.
Number of Naperville Businesses for Sale in the Dataset
The study data comprised 582 listings in the Chicago-Naperville-Joliet, IL-IN-WI metro area. As such, some of the businesses used to derive the median valuation might be outside of Naperville, but they are in the area and so are likely representative of Naperville business valuations.
In Q1 2008, just one year ago, there were 601 Naperville listings in the BizBuySell.com dataset. As a result of the recession, fewer Naperville business owners are selling because they hope to weather the storm and sell after the economy turns around.
Q1 2009 Revenue Multiples In Naperville, IL
In the Chicago-Naperville-Joliet, IL-IN-WI metro area, companies will typically sell for 0.82 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this area of the country.
In other words, a firm with revenues of $200,000 might list for $163,591. Keep in mind that this is just an average for revenue multiples in Naperville and surrounding communities. Some firms will have higher revenue multiples and others will have lower revenue multiples.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $450,000 in Q1 2009.
To put this in perspective, the Q1 2008 revenue multiple was 0.85 and the median revenue for listed businesses was $407,644.
Q1 2009 Cash Flow Multiples In Naperville, IL
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Chicago-Naperville-Joliet, IL-IN-WI metro area was 3.28.
So, a firm with cash flows of $150,000 might have an asking price of $491,836. That calculation is dependent on the business selling for the area's average multiple. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in Naperville, BizBuySell.com reports that the median cash flow for Naperville area businesses was $100,448 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.38 and the median cash flow was $100,000.
Things to Consider When Selling a Business in Naperville, IL
When setting a price for a business, it's worthwhile to invest in a professional valuation. If you define the business selling price without a professional valuation, you may end up leaving money on the table or having an unrealistic price that prevents a deal from ever getting done. This helpful tip on buying a business comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Naperville, IL Businesses
If you are contemplating buying a business or selling a business and would like to look at comparables in the area, we suggest you try the BizBuySell.com Business Valuation Tool. You can modify the dataset that creates business valuation estimates to meet your specific criteria. As a bonus, access to the tool is very affordable -- less than $100.
More Information on BizBuySell.com's Quarterly Reports
The BizBuySell Insight Report is a nationally-recognized economic report that tracks trends in the business-for-sale marketplace. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Naperville, IL Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for companies in the Chicago-Naperville-Joliet, IL-IN-WI metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Naperville area, based on BizBuySell.com's quarterly reports.
Here is how cash flow multiples are trending in the Naperville area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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